It was good news for Barton County Monday morning as commissioners heard a report on the county’s 2020 audit from Melissa Ille, senior manager, Adams, Brown – a report punctuated by the impact of the COVID-19 pandemic. The county earned an “unmodified” opinion “which is a clean opinion,” Ille said. The only problem was a minor reporting issue with some federal COVID relief funds, a matter that can be easily corrected.
The report covered the financial condition of Barton County from Jan. 1, 2020, through Dec. 31, 2020.
Going over the financial statements, she said the county began with an unencumbered cash balance of $18,022,417, but $24 in canceled encumbrances for the year. The county brought in receipts of $34,898,849 and paid out expenditures of $32,500,591, bringing the county to an ending unencumbered cash balance of $20,120,689 for the year.
Ille brought up one footnote to the financial statements. It regarded Coronavirus Aid, Relief, and Economic Security Act, (CARES Act) funding and COVID-19 related matters.
“It was just identifying that we did have COVID-19 happening and that some additional funding through the SPARKS (Strengthening People And Revitalizing Kansas) Program was available for the county,” she said.
A federal funding issue
She also mentioned two new letters attached to the audit that the county hasn’t had to deal with in the past. The first noted the county was subject to a single audit due to federal expenditures that exceeded $750,000 for the year.
Chosen for the audit was the SPARKS funding, Within that, the firm issues a letter going over the internal controls over financial reporting and compliance.
“This is where we would disclose any significant deficiencies or material weaknesses related to financial statements, power controls and reporting,” she said. “And we had none related to that to disclose.”
The second letter dealt with compliance over each major program. Again, this was the SPARKS Program.
“Within our testing, we did note one issue, and we disclose that as a ‘significant issue,’” she said. This was a timing problem related to use of the funding regarding payroll.
“So for that reason, we do qualify our opinion,” Ille said. “However, we’re only qualifying our opinion on that program for that one specific finding.”
“If that becomes a problem for us, when we find that out?” District 5 Commissioner Jennifer Schartz said.
“I don’t know a time line on that,” Ille said. They will submit the audit report, probably this week, to the state of Kansas. After that, the data collection will be reviewed locally, submitted to the Federal Audit Clearinghouse for its review.
She said Barton County was not alone in getting hit with this. In a nutshell, counties have to be sure to pull SPARKS funds for payroll reimbursement after the start date and before the end date covered by the program.
However, the county’s pay period straddled the start date. Employees were paid for work done prior to the start in a paycheck that came after the start.
But, even though these costs can’t be covered by SPARKS, Ille said the county has enough other qualified expenses for which these costs can be reimbursed.
The dollar amount involved is about $ 65,000. However, they’ve identified over $160,000 in wages that would have qualified.
She also called commissioners’ attention to a summary of federal expenditures, listing all the federal programs the county participated in during the year. This was more extensive due to the COVID funding.
And, in reference to the single audit, she said no material significant issues were found in the financial statements. But, there was the problem with the payroll.
A lot of unknowns
“Typically, I do have a few additional recommendations to go over for internal control and we report that within our governance letter,” she said. “These are things that weren’t material or significant in nature, but just general recommendations.”
But, “over the past couple of years the County has taken all those recommendations that we’ve given, evaluated them and seen they were a good fit and implemented what was a good fit.” So, as a result of this, “I don’t have any recommendations this year for you.”
“I just want to say that I think our administrative team has done a really good job,” Schartz said. “Because when we received this SPARKS money it was a moving target. “
They didn’t know what they could use it for, and every day, things would change. “So the fact that we only had one little oopsie, really speaks highly of our team.”
“The spark program was brand new and as limited information came out in stair steps,” Ille said.